2026 (3) TMI 494

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....ikita Garg, Jr. Standing Counsel and Mr. Vidhul Kapoor, Jr. Standing Counsel. JAGMOHAN BANSAL, J. (ORAL) 1. As common issues are involved in the captioned appeals, with the consent of both sides, the same are hereby disposed of by this common order. For the sake of brevity and convenience, facts are borrowed from ITA-517-2008. 2. The appellant through instant appeal under Section 260A of the Income Tax Act, 1961 (for short '1961 Act') is seeking setting aside of order dated 25.01.2008 passed by Income Tax Appellate Tribunal, Chandigarh (for short 'ITAT') for the Assessment Year 2000-2001. 3. The appeal was admitted on 05.01.2015 to adjudicate following questions of law:- i. The nature of sales tax subsidy/exemption gran....

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....ed under Section 143(1) of 1961 Act and refund of Rs. 2.92 crore was assessed. The appellant filed revised return on 18.07.2001 revising its total income from Rs. 28.04 crore to 26.73 crore. The Assessing Officer vide order dated 31.03.2003 assessed appellant's income to the tune of Rs. 42.55 crore and imposed super tax penalty/fine amounting to Rs. 7.34 crore. The appellant preferred an appeal which came to be partly allowed vide order dated 31.03.2003 passed by Commissioner of Income Tax (Appeals). The appellant filed appeal before ITAT which vide order dated 25.01.2008 declined its claim qua sales tax subsidy. The Tribunal held that sales tax subsidy was revenue receipt, thus, liable to tax. 6. Learned Sr. counsel for the appellant....

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....de, thus, this Court cannot ignore said judgment. 8. On being asked about order of ITAT passed in compliance of order dated 18.12.2014 of this Court in ITA-146-2014 titled as "M/s Vardhaman Acrylic Ltd. Vs. Commissioner of Income Tax", learned counsel for the respondent submitted that ITAT has adjudicated the issue in favour of assessee on the basis of judgments of Supreme Court in Chaphalkar Brothers (supra). He further conceded that Tribunal has allowed appeal of the assessee on the basis of consent accorded by Department. 9. Heard the arguments and perused the record. 10. This Court in Abhishek Industries (supra) formed an opinion that there is no dispute that sales tax subsidy is being received on recurring basis after the unit....

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....K High Court in Shree Balaji Alloys (supra). It is apt to notice here that J&K High Court in Shree Balaji Alloys (supra) was adverting to nature of excise duty exemption granted to units set up in State of Jammu & Kashmir. As per Central Government Scheme, the units set up in J&K were entitled to collect excise duty for 10 years, however, were not liable to deposit with Department. J&K High Court while reversing judgment of ITAT held that excise duty subsidy is capital receipt as it is linked with investment and generation of employment in J&K. 12. This Court in ITA-292-2019 remanded the matter back to ITAT to determine the nature of sales tax subsidy. The remand order was passed considering judgments of this Court in Abhishek Industries....